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Banks scandal draws election laws review

The Government is planning to change local government campaign laws in the wake of the John Banks donations scandal.

Local Government Minister David Carter this afternoon said there was a "significant issue around anonymous donations" to local body candidates and the Government wanted "to tidy that up" before next year's elections.

Police last week said there was not enough evidence to charge the Epsom MP over anonymous donations to his failed Auckland super city mayoralty campaign.

Police found Banks solicited money for his campaign from MegaUpload founder Kim Dotcom, but were unable to establish he knew two $25,000 gifts recorded as anonymous on his electoral return were from the multi-millionaire. The return was compiled by volunteers.

Police also found Banks solicited radio advertisements declared as anonymous.

They were unable to consider other charges because they fell outside the time limit allowed in the Local Electoral Act.

Both Prime Minister John Key and Labour leader David Shearer yesterday said there should be changes to the law under which Banks had received the donations.

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Both Labour and the Greens tried unsuccessfully today to have bills introduced to Parliament to reform the rules.

However, Carter said work on a Government bill was underway and "making good progress".

The rules for central government campaign donations could be used as a guide, but there was "quite a lot of complexity" about comparing the two.

"But the big issue is around the anonymous donations and I think we can find a way to tidy that up," Carter said.

Changing the law before next year's local body elections was "certainly what we're trying to work to do".

He could not give any details on the new legislation as the work had not been completed yet.

"We need to do the homework first to see how feasible it is to get legislation that's appropriate and making sure that it has a reasonable time for introduction so that local body politicians know the rules before they engage," Carter said.

"We're certainly looking at a piece of work that would address the significant issue around anonymous donations, rather than a bigger piece of work around the whole of the running of elections associated with local government."

Labour's deputy leader Grant Robertson said their bill would make the local election donations regime the same as for central government candidates.

"Quite clearly, what we've seen in Mr Banks' case is a situation where while he might be able to claim that he hasn't technically broken the law, he's clearly breached the spirit of transparency that New Zealanders would expect around political campaigns," Robertson said.

"If the law needs to change to stop the likes of Mr Banks doing what they're doing, then we'll change the law."

Green Party MP Denise Roche said her bill would restrict anonymous donations to $500.

“Politics should be about the best ideas not about which politician has friends with the deepest wallets,” Roche said.

“In keeping with this we also consider that there should be a cap of $5000 on donations from any person or group."

Banks himself yesterday said he "absolutely" backed donations reform, but he today declined to answer questions.